In this mini-case you will complete the test of details on accounts receivable for the 2022 audit of EarthWear Clothiers, Incorporated. The principal test of detail involves sending "confirmations" or letters to customers so that they can confirm that they owe EarthWear the reported balance. All six customer accounts receivable balances exceeding $100,000 were targeted for testing. These six balances, aggregated total of $921,000, were confirmed without exceptions. The remaining accounts are of similar size and total $7,722,000 and will be tested via audit sampling. Inputs for the sample size determination were, Desired Confidence Level--95%, Tolerable Misstatement--$600,000, and Expected Misstatement--$154,440. Based on these inputs, 67 accounts receivable balances were selected for confirmation requests. The first 63 accounts receivable confirmations have already been reviewed by other staff members and no errors have been found. The remaining four confirmations require your review as they were returned with notes from customers indicating a potential misstatement. Please note that legitimate timing differences do not result in misstatements.

INSTRUCTIONS:

Please download the files below to complete the audit tasks associated with this mini-case. The Excel workbook contains the instructions and workpapers you are to complete.

Input your responses from Work Paper 10-1 into the corresponding questions in Connect. Note: Leave no cell blank - Be sure to enter " 0 " wherever required. Nonstatistical Evaluation of Errors Note: Round your percentage answers for "Ratio of Misstatements" to 4 decimal places. Round all other answers to the nearest whole dollar. Leave no cell blank - Be sure to enter "0" wherever required. Statistical Evaluation of Errors using IDEA Monetary Unit Sampling Note: Round you answers to 2 decimal places. Negative amounts should be entered with a minus sign. Leave no cell blank - Be sure to enter "0" wherever required. After completing both the nonstatistical and statistical evaluation methods, please briefly discuss how the results compare to each other in the space provided on Work Paper 10-1. Are the monetary amounts and overall conclusions similar